The Two Kinds of Tariffs - Assignment Example

Import and export tariffs differ in their scopes and rationale. An import tariff is a tax on a product that is imported into a country while an export tariff is charged on commodities that are exported from a country. One of the reasons for export tariffs is to regulate the flow of commodities from the subject countries and this is achieved by increasing the total cost of the commodity in the global market, but not in the domestic market.
The achieved high cost makes the product less competitive, based on price and relative to substitutes, and this minimizes flow from the subject country (Carbaugh 110). The underlying reasons behind regulating the movement could be to ensure the exclusive availability of the target products for domestic use and to support local industries that rely on the target products. Read More